In what could be a harbinger of improving fortunes for our industry, a record turnout of 360 showed up at the 2010VAI User Conference, held Nov. 4-8 at Disney’s plush Boardwalk Inn at the Disney World complex in Orlando, FL. Attendees were treated to a three-day festival of seminars and workshops detailing new capabilities of VAI’s S2K enterprise management software, along with a lavish customer appreciation dinner on opening night, and guest speakers topped by author and former TV show host Ross Shafer, IBM worldwide product manager Guy Paradise and the entertaining Raspyni Brothers.
Amid last year’s wretched economy, VAI downgraded its 2009 user gathering to a videoconference. Founder and President Bob Vormittag said VAI’s business had dropped 12% last year but has since gained that back and more.
“In 2009 we saw an austerity process taking place with our customers that included a lot of downsizing - or perhaps you can call it right-sizing,” Vormittag told me. “They became more efficient, and technology really favors that cause. Now they are coming out of that austerity mode, as evidenced by the record-breaking attendance at this conference. This has been a good growth year for us, one that we’ve dedicated to product development and enhancements to add new value in our new economy of hyper-productivity.”
About 50% of VAI’s business comes from distributors (the rest from manufacturers and the retail sector). I sat down with Vormittag for an interview focused on technology and distributors, as follows:
Supply House Times: Where do most distributors fall short in using technology?
Bob Vormittag:In the 1990s most companies updated back offices with rudimentary purchasing and inventory systems. Now our challenge is to get everybody more attuned to advanced applications in purchasing and warehouse automation that produce tremendous efficiencies. It’s a large challenge for most of them to undertake, requiring cultural changes within organizations. But these are critical for our customers to take on to remain competitive.
Q: I’ve heard some distributors remark there is so much information available to them, they are concerned about paralysis by analysis? How can they avoid that?
Vormittag:I’m not so sure over-analyzing is a problem. Our findings from the field are just the opposite - there’s not enough focus on the numbers and making decisions based on the sophisticated tools we have now. It’s really good to get into a high level of detail to do a better job of managing the company. Areas that can be improved in most companies are inventory and the ordering process - balancing inventory, reducing dead stock and backorders, along with sales analysis.
Q: In your opening presentation you mentioned meeting with your Advisory Council last night. Tell us about them.
Vormittag:We met with about 20 in the group yesterday, and had a great go at it. Every year they make suggestions, along with attendees who will be in two open forums at this conference. Typically we will update 125-130 features each year based on their suggestions. They help us determine what they need and partner with us in development.
Q: What’s your take on social media?
Vormittag:Right now it’s more a personal than a business vehicle. The question is where does it go from here? We have to be mindful of it, and nimble in watching where it goes. The role of social media I think has yet to be determined but will definitely be part of our business future.
Q: What’s your biggest challenge? What keeps you up at night?
Vormittag:Coming out of these austerity years we’ve passed through, you really have to win business that already exists by taking it from a competitor. We must persuade prospective customers to move forward with our systems based on ROI. So we continue to work towards that end and quantify it in a way that they can see it’s economically feasible to go with a system that’s superior to all others. This creates challenges because our competitors are numerous and also have great products.
The driver for us has been development and product enhancements. This past year we’ve taken on more development projects than ever, and in 2011 we will operate at an even greater pace.
Q: There has been much consolidation in your business, with VAI being one of the only independent holdouts. Is that an advantage?
Vormittag:Most definitely. One thing we bring to the table as a privately held company and family business is to personalize service. We have had many customers with us 20-25 years, and the reason is personal relationships. They know they can call us anytime and be prioritized. We’re able to offer them service they need and take them to a higher and higher level each year.
Another advantage of being a privately held company is taking a significant percentage of our profit and reinvesting it in our product. That’s a direct correlation to growth from our perspective, and we’ll continue on an ever grander scale in the future.
Q: What do you see for your technology five years in the future?
Vormittag:Five years ago what we were doing is totally different than what we’re doing today. We had to take a crystal ball with our development efforts. Right now it’s all about the Web and all about mobility - and also globalization. We’re adding Spanish right now and are on a fast track to have that ready next year for deployment.
We’re also very much involved with doing business over the Web, including e-commerce, sales force automation and Web site development.
Our product development also is focused on mobility with versatile devices that can be transported easily. We’re interacting with the iPad, for instance, which can be used in a multitude of ways for a salesperson in the field. The benefit of the iPad is it’s large enough to have a reasonable keypad that allows you to process orders and so on. We also have some of our applications running on the iPhone, which is more popular now, although size limits its utility. Our system will run on any handheld devices. Technology will drive mobility and make it easy for salesmen to have any time, anywhere computing. We see that taking off.